Tony Lomas, lead administrator of Lehman Brothers, says LBIE, Lehman London Bank /Dealer, will have £5bn in surplus after liquidation. LBIE has paid or will pay to all its unsecured debtors. It turns out that it was not insolvency but liquidity problem for UK arm of Lehman Brother.
This is the confirmation of same view that most of the regulators and bankers have. Banks funded lot of its long term liabilities with short term funding instruments and this can not be continued in stressed period.
Lot of focus is already on liquidity even Basel committee has included liquidity rations in Basel 3 guide lines.
Question is who will get the windfall from this surplus ?
This is the confirmation of same view that most of the regulators and bankers have. Banks funded lot of its long term liabilities with short term funding instruments and this can not be continued in stressed period.
Lot of focus is already on liquidity even Basel committee has included liquidity rations in Basel 3 guide lines.
Question is who will get the windfall from this surplus ?
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